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Income Tax Act 2007

Avoidance and non-market transactions - Avoidance: specific - Arrangements involving residential land

GB 53B: Interposed residential property percentage: increases or decreases in value

You could also call this:

"What happens to your interposed residential property percentage if its value changes to avoid rules?"

Illustration for Income Tax Act 2007

You have an interposed residential property percentage. It is defined in section DH 6. This percentage might change in value. The change happens when someone does something to avoid the rules in subpart DH. You ignore the change in value when you calculate your interposed residential property percentage. This applies when the change is caused by an action or an arrangement that avoids the rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS684939.

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Money and consumer rights > TaxesHousing and property > Buying and selling homes
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Part GAvoidance and non-market transactions
Avoidance: specific: Arrangements involving residential land

GB 53BInterposed residential property percentage: increases or decreases in value

  1. This section applies when there is an increase or decrease in value that affects, or would affect the result of a calculation of a person’s interposed residential property percentage, defined in section DH 6 (Interposed residential property percentage), and the increase or decrease is—

  2. caused by an action or omission that has, or would have the purpose or effect of defeating the intent and application of subpart DH (Interest incurred in relation to certain land):
    1. produced by an arrangement that has a purpose or effect of defeating the intent and application of subpart DH.

      1. The effect of the increase or decrease in value on the calculation of a person’s interposed residential property percentage is ignored.

      Notes
      • Section GB 53B: inserted (with effect on 27 March 2021), on , by section 112 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).